What Will Result from an Increase in the Activity Level

question 85

Multiple Choice

What will result from an increase in the activity level within the relevant range?

• A) An increase in fixed cost per unit.
• B) A proportionate increase in total fixed costs.
• C) An unchanged fixed cost per unit.
• D) A decrease in fixed cost per unit.

---

Definitions:

Pure Market System

is an economic model where prices for goods and services are determined by open market and consumers, without government intervention.

Limited Choice

The situation in which individuals or groups have restricted options and alternatives to choose from in making decisions or in selecting products/services.

Government Intervention

Actions taken by a government to influence or directly manage an economy or specific industries, often to correct market failures or promote social welfare.

Economic Systems

The structured and organized ways societies allocate resources, produce goods and services, and distribute wealth among their populations.